- Tuesday's surge in government bonds picked up momentum when a top official of the European Central Bank suggested that the rate-hiking cycle may be nearing its end.
- After ECB Governing Council member Klaas Knot stated that further monetary tightening is far from certain, yields fell. A two-week low, the yield on German 10-year bonds dropped as much as 8 basis points to 2.4%.
- After Bank of America's second-quarter profit surged on a surprise gain from its core Wall Street businesses, S&P 500 futures remained stable. That came after a slew of encouraging financial reports released last week by JPMorgan, Wells Fargo, and Citi for the third quarter, which was marked by regional banking turmoil and continuous interest-rate hikes amid inflation worries.
- The slowdown in inflation is leading central bankers to talk more dovishly and fuel speculation that they are prepared to slow down the quickest pace of hikes in four decades. Ignazio Visco, a member of the ECB Governing Council, stated that once lower commodity prices begin to spread across the economy, inflation may decline more quickly.
- ECB's Knot: We'll need to hike in July.
